Lower coal allocation, non-availability of railway rakes impacting paper mills: IPMA

Operations of Indian paper mills are getting severely impacted by lower coal allocation and non-availability of adequate railway rakes for transportation of coal to the mills, an industry body said on Tuesday.

Indian Paper Manufacturers Association (IPMA) said that for the last several months, Coal India and its subsidiaries have prioritised coal supplies the thermal power plants on priority at the cost of non-power sectors.

''The problems have been compounded by even priority allocation of railway rakes to the power sector/ thermal power plants,'' it said in a statement.

In a communication to Union Ministers of Coal & Mines and Railways, IPMA has urged the government to consider priority allocation of both coal and railway rakes to captive power plants of the pulp and paper industry at par with thermal power plants/ power sector.

''If supplies of coal from allocated/ designated mines to paper mills as prior to June 2021 are not restored on priority, a large number of paper mills may need to have prolonged shutdowns resulting in a shortage of writing and printing paper and packaging paper in the market and this may have cascading impact on all FMCG, food and pharma sectors,'' IPMA President A S Mehta said.

According to IPMA, pulp and paper industry is capital and power intensive, and has invested a huge amount of money in setting up captive power plants for sustained supply of power and steam for the process requirements.

''Paper industry is a continuous process industry and energy cost is a significant part of the total production cost in paper mills,'' it said.

IPMA also said that a resurgent paper industry is a must for sustained economic growth since paperboard and packaging is crucial for all kinds of essential goods, FMCG, pharmaceuticals, food products, soaps, milk cartons and hygiene products, among others.

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